November 13, 2020
Jamaican Teas Ltd (JAMT)
Financial Statements for the Year Ended September 30, 2020:
Jamaican Teas Limited (JAMT) reported a 70% increase in revenues to total $2.20 billion (2019: $1.29 billion). For the quarter, revenues amounted to $786.74 million (2019: $282.07 million). JAMT highlighted that, “The sale of 12 units at the Manor Park complex contributed $248 million to the total revenue in 2020. There were no comparable sales in the prior year. The remaining $125 million growth in sales reflects the increase in export and domestic sales in the manufacturing business. The jump in exports was mainly due to strong demand from the final consumers, particularly in the USA. The trend continues beyond the year end.”
Cost of sales increased by 67% to $1.60 billion (2019: $958.09 million). likewise, gross profit rose 81% to $602.25 million (2019: $333.10 million). For the quarter, gross profit closed at $210.16 million relative to $54.15 million reported in the previous year’s corresponding quarter.
Other loss was reported at $433.22 million versus other income of $550.95 million in the prior year.
Administrative expenses increased by 8% to $232.62 million for the year ended September 2020 relative to $216.42 million for 2019. Sales and Marketing costs went up by 4% totaling $52.83 million (2019: $50.97 million). For the quarter administrative expenses and sales & marketing costs closed at $68.61 million (2019: $73.50 million) and $11.02 million (2019: $10.72 million) respectively. The Company noted, “lower administration expenses for the quarter were largely due to reduced expenses at QWI.”
Finance cost for the year amounted to $31.62 million relative to $28.18 million reported in 2019. While, finance costs for the quarter closed $7.80 million (2019: $12.35 million).
Pre-tax loss amounted to $148.03 million relative to the pre-tax profit of $589.73 million booked the previous year. For the quarter, pre-tax profit amounted to $164.74 million (2019: $300.31 million).
Tax credit for the year amounted to $16.32 million in contrast to an outflow of $106.61 million in 2019. Net loss for the year totaled to $131.71 million relative to net profit of $483.12 million recorded twelve months earlier. Profit for the fourth quarter closed at $137.61 million (2019: $215.36 million).
For the year end, net profit attributable to shareholders climbed to $210.30 million (2019: $395.76 million). While for the quarter, net profit attributable to shareholders amounted to $131.65 million, a 26% decline relative to $176.91 million in the prior comparable quarter. Total comprehensive income closed the year at $210.30 million relative to $395.76 million in 2019.
Consequently, earnings per share totaled $0.30 compared to $0.57 for the year ended September 30, 2020, while for the quarter, the EPS was $0.19 (2019: $0.26). The numbers of shares used in the calculations are 695,083,459 units. JAMT last traded on November 13, 2020 at $5.66 with a corresponding P/E ratio of 18.79 times.
Management mentioned, “Subsequent to the year end, overall sales increased by 47 percent in October 2020, with export sales increasing 85 percent and a 10 percent increase in domestic sales. We have good orders in hand for November and these developments, along with booking of more real estate sales and hopefully, improvement in the investment portfolio, should result in a good first quarter for the financial year 2021.”
Balance Sheet Highlights:
As at September 2020, the Company’s total assets amounted to $3.35 billion, a 13% decline when compared to the $3.85 billion reported as at September 2019. This declined was tempered by a 109% growth in ‘Cash and Bank’ from $146.32 million in 2019 to $ 306.28 million for the period under review. Also, by ‘Inventories’ and ‘Investment’ which closed at $302.08 million (2019: $197.98 million) and $1.63 billion (2019: $1.36 billion), respectively.
Shareholders’ Equity totalled $1.79 billion as at September 30, 2020 (2019: $1.55 billion), resulting in a book value per share of $2.57 (2019: $2.23).
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